HONG KONG and SHANGHAI (Reuters) – China’s Huawei, hit by crippling U.S. sanctions, could see shipments decline by as much as a quarter of this year and is faced with the possibility that its smartphones will disappear from the international markets, analysts said.
FILE PHOTO: A scratch on the surface Huawei logo is seen on a smartphone in this illustration photo taken on May 20, 2019. REUTERS/dado Ruvic/Illustration//File Photo
Smartphone shipments by Huawei, the world’s second largest smartphone maker by volume, can be tumble dried between 4% and 24% in 2019, if the ban remains, according to Fubon Research and Strategy Analytics.
Several experts say that they expect that Huawei’s shipments to slide over the next six months, but declined to give a hard estimate because of the uncertainties surrounding the ban.
The U. S. Commerce Department blocked Huawei from buying U.S. goods last week, in the midst of the growing trade fight with China.
The prohibition applies to goods and services by 25% or more of the U.S. originated technology or materials, and may, therefore, affect non-U.s. companies.
Tech companies, including Google and SoftBank Group-owned chip designer ARM have said that they will cease deliveries and updates for Huawei.
“Huawei may be wiped out of the Western European smartphone market next year as it loses access to Google,” said Linda Sui, director of wireless smartphone strategies at Strategy Analytics.
She predicts Huawei handset shipments will decline another 23% next year, but thinks the company could survive on the sheer size of the chinese market.
Fubon Research, which previously forecast Huawei would ship 258 million smartphones in 2019, now, the company expects to ship only 200 million in a worst-case scenario.
Huawei commands almost 30% of the global market according to industry tracker IDC, and will be delivered to 208 million phones in the last year, including a half to markets outside of China. The company has Europe the most important market for premium smartphones.
Huawei has said: it is the development of the technology should be self-sufficient for years.
But experts are not buying the company’s claim.
She said that key components of intellectual property necessary for Huawei’s devices are not available outside of the United States.
Huawei might have to lay off thousands of people, and “disappear as a global player for some time”, said Stewart Randall, who tracks the chip industry in Shanghai consultancy Intralink.
Potential buyers of Huawei’s phones are likely to switch to high-end devices from Samsung and Apple Inc, and also buy mid-end phones from domestic rivals OPPO and Vivo, analysts said.
“Of late a amount of parts in its wake that can be picked up by the competitors, in particular Samsung, given the strength in the regions such as Europe,” said Bryan Ma, research into the global smartphone market (IDC).
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Huawei devices are already signs fewer clicks of online shoppers, as the United States on the black list of the company, in accordance with PriceSpy, a product comparison site, which attracts an average of 14 million visitors per month.
“For the past four days, Huawei devices have dropped down the popularity of the reception, almost the half of the number of clicks as they did last week in the united kingdom and 26% less on the global stage,” PriceSpy said.
The ban on the export of Huawei can also delay China’s 5G roll-out, Jefferies analyst Edison Lee said. Huawei has said that it signed 5G contracts with over 40 clients all over the world.
Reporting by Sijia Jiang in HONG KONG and Josh Horwitz in Shanghai; Writing by Sayantani Ghosh; editing by Louise Heavens